Find the break-even point for the firm whose cost function C and revenue function R are given. C(x) = 16x + 24,000; R(x) = 24x
A) For a break-even operation, the firm should manufacture 24,000 units of its product, resulting in a break-even revenue of $720,000.
B) For a break-even operation, the firm should manufacture 24,000 units of its product, resulting in a break-even revenue of $72,000.
C) For a break-even operation, the firm should manufacture 3,000 units of its product, resulting in a break-even revenue of $72,000.
D) For a break-even operation, the firm should manufacture 3,000 units of its product, resulting in a break-even revenue of $720,000.

Question

Quizplus · Accepted Answer

To find the break-even point, set the cost function equal to the revenue function: 16x + 24,000 = 24x. Solving for x gives x = 3,000 units. To find the break-even revenue, substitute x = 3,000 into the revenue function: R(3,000) = 24(3,000) = 72,000.

Find the Break-Even Point for the Firm Whose Cost Function